8-K
0001138723false00011387232023-01-302023-01-30

 

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): January 30, 2023

 

 

ACCURAY INCORPORATED

(Exact name of Registrant as Specified in Its Charter)

 

 

Delaware

001-33301

20-8370041

(State or Other Jurisdiction
of Incorporation)

(Commission File Number)

(IRS Employer
Identification No.)

 

 

 

 

 

1310 Chesapeake Terrace

 

Sunnyvale, California

 

94089

(Address of Principal Executive Offices)

 

(Zip Code)

 

Registrant’s Telephone Number, Including Area Code: 408 716-4600

 

 

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:


Title of each class

 

Trading
Symbol(s)

 


Name of each exchange on which registered

Common Stock, $0.001 par value per share

 

ARAY

 

The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

 

 


 

 

Item 2.02 Results of Operations and Financial Condition.

On February 1, 2023, Accuray Incorporated (the “Company”) issued a press release announcing its financial results for the second quarter ended December 31, 2022. A copy of the Company’s press release dated February 1, 2023, titled “Accuray Reports Fiscal 2023 Second Quarter Financial Results” is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

 

The foregoing information (including the exhibit hereto) is being furnished under “Item 2.02 Results of Operations and Financial Condition” and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”), except as shall be expressly set forth by specific reference in such filing.

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

 

(d) Effective January 30, 2023, the Board of Directors (the “Board”) of the Company appointed Mr. Robert C. Kill as a Class I member of the Company’s Board in order to fill a vacancy on the Board. Mr. Kill is expected to stand for re-election at Company’s 2025 Annual Meeting of Stockholders, when his Class I term will expire.

 

In connection with his appointment, Mr. Kill will receive the same cash and equity compensation for service on the Board that was approved by the Board. Cash compensation for his Board service is an annual cash retainer of $52,500.

 

Mr. Kill’s equity compensation is as follows: (1) in connection with his initial appointment to the Board, a restricted stock unit (“RSU”) grant for that number of shares of the Company’s common stock equal to $150,000 divided by the fair market value of one share of common stock on the grant date, prorated for the months of service between Mr. Kill’s appointment to the Board and the Company’s next Annual Meeting of Stockholders, with full vesting on the one-year anniversary of the Company’s 2022 Annual Meeting of Stockholders, subject to Mr. Kill’s continued service (the “Initial RSU Grant”); and (2) annually, on the last day of the month in which the Company’s Annual Meeting of Stockholders is held, an RSU grant for the number of shares of the Company’s common stock equal to $150,000 divided by the fair market value of one share of common stock on the grant date, with full vesting on the one-year anniversary of the Annual Meeting of Stockholders to which the grant relates, subject to Mr. Kill’s continued service (the “Annual RSU Grant”). Vesting of all RSUs subject to the Initial RSU Grant and any Annual RSU Grant thereafter accelerate in full in the event of a change in control of the Company.

 

There are no arrangements or understandings between Mr. Kill and the Company pursuant to which Mr. Kill was appointed as a director. In addition, there are no related party transactions involving the Company and Mr. Kill that are reportable pursuant to Item 404(a) of Regulation S-K under the Securities Act.

 

Item 7.01 Regulation FD Disclosure.

 

Management Presentation

 

Spokespersons of the Company plan to present the information in the presentation attached hereto as Exhibit 99.2 to analysts and investors from time to time on or after February 1, 2023. The presentation will be available on the Company’s Investor Relations website at: http://investors.accuray.com.

 

The furnishing of the attached presentation is not an admission as to the materiality of any information therein. The information contained in the presentation is summary information that is intended to be considered in the context of more complete information included in the Company’s filings with the U.S. Securities and Exchange Commission and other public announcements that the Company has made and may make from time to time by press release or otherwise. The Company undertakes no duty or obligation to update or revise the information contained in this report. For important information about forward looking statements, see the slide titled “Forward-Looking Statements” in Exhibit 99.2 attached hereto.

 

The information set forth under Item 2.02 of this Current Report on Form 8-K is incorporated by reference into this Item 7.01.

 

Press Release

 

2


 

On February 1, 2023, the Company issued a press release regarding the appointment of Mr. Kill to the Board. A copy of this press release is included as Exhibit 99.3 to this Current Report on Form 8-K.

 

The information contained in this Item 7.01 disclosure, including Exhibit 99.1, Exhibit 99.2 and Exhibit 99.3, is furnished pursuant to Item 7.01 and shall not be deemed to be “filed” for the purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that Section, nor shall it be incorporated by reference into a filing under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

 

Exhibit No.

 

Description

99.1

 

Press release dated February 1, 2023, titled “Accuray Reports Fiscal 2023 Second Quarter Financial Results”

99.2

 

Accuray Second Quarter Fiscal 2023 Earnings Call Presentation.

99.3

 

Press release dated February 1, 2023, titled "Robert C. Kill Joins Accuray Board of Directors"

104

 

Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

3


 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

 

ACCURAY INCORPORATED

 

 

 

 

Date:

February 1, 2023

By:

/s/ Ali Pervaiz

 

 

 

Ali Pervaiz
Senior Vice President & Chief Financial Officer

 

4


EX-99.1

Exhibit 99.1

 

https://cdn.kscope.io/42e85e6493cba383222016e6f988eb0e-img235950492_0.jpg 

 

 

 

 

Accuray Reports Fiscal 2023 Second Quarter Financial Results

 

 

 

Delivered strong Q2 performance amidst challenging macroenvironment; Reiterate fiscal year guidance

 

SUNNYVALE, Calif., February 1, 2023 — Accuray Incorporated (NASDAQ: ARAY) today reported financial results for the second quarter of fiscal 2023 ended December 31, 2022.

 

Second Quarter Fiscal 2023 Summary

Gross orders of $79.0 million decreased 7.4 percent from the same period in the prior fiscal year and increased 13.2 percent sequentially, representing a book to bill ratio of greater than 1.2. Gross orders on a constant currency basis were $82.6 million.
Net revenue of $114.8 million decreased 1.3 percent from the same period in the prior fiscal year, mainly driven by supply chain constraints and a $6.1 million foreign exchange headwind. Net revenue on a constant currency basis was $120.9 million, which represents a 4.0 percent increase versus the same period in the prior fiscal year.
GAAP net loss of $1.9 million, as compared to GAAP net income of $0.2 million in the same period in the prior fiscal year. Adjusted EBITDA of $8.5 million, as compared to adjusted EBITDA of $6.8 million in the same period in the prior fiscal year, which represents a 24.1 percent increase.

 

Other Recent Operational Highlights

Accuray receives IMV Award for Best in Service in Radiation Oncology for 2022.
34 new system orders globally with notable strength in the America's region with 92 percent year over year growth.
Advanced progress in China, with Accuray being awarded 18 systems in the November Ministry of Health (MOH) Type A central bidding process (7 CyberKnife Systems, 11 Radixact Systems).
NMPA regulatory submission completed for Tomo® C, the joint venture product for the China Type B segment; completed production and testing of the first Tomo C unit in Tianjin manufacturing operations.

 

“We have delivered another strong quarter of performance in Q2 showcasing the growing customer demand for our precision radiotherapy solutions and the excellent operational execution by the Accuray team amidst challenging macroeconomic conditions,” said Suzanne Winter, Chief Executive Officer. “Our teams remain focused on advancing our innovation driven growth agenda so that we can deliver on our promise to improve the outcome and quality of life of patients diagnosed with cancer or neurological disease.”

 

Fiscal Second Quarter Results

Total net revenue in the second quarter of fiscal 2023 was $114.8 million, compared to $116.3 million in the prior fiscal year second quarter. Product revenue in the second quarter of fiscal 2023 was $63.3 million, compared to $60.7 million in the prior fiscal year second quarter, while service revenue for the second quarter of fiscal 2023 was $51.5 million, compared to $55.6 million in the prior fiscal year second quarter.

Total gross profit in the second quarter of fiscal 2023 was $43.0 million, or 37.4 percent of total net revenue, compared to total gross profit of $42.6 million, or 36.7 percent of total net revenue, in the prior fiscal year second quarter.


 

Operating expenses in the second quarter of fiscal 2023 were $40.3 million, including non-recurring charges of $1.9 million for restructuring charges and $0.5 million of ERP and ERP related expenditures, compared to $38.6 million in the prior fiscal year second quarter. Excluding these non-recurring charges, total operating expenses were down 2.0 percent compared to the same period in the prior fiscal year.

Net loss in the second quarter of fiscal 2023 was $1.9 million, or $0.02 per share, compared to net income of $0.2 million, or $0.00 per share, in the prior fiscal year second quarter. Adjusted EBITDA in the second quarter of fiscal 2023 was $8.5 million, compared to $6.8 million in the prior fiscal year second quarter.

 

Gross product orders in the second quarter of fiscal 2023 totaled $79.0 million compared to $85.4 million in the prior fiscal year second quarter. Order backlog as of December 31, 2022 was $515.2 million, approximately 11.4% percent lower than at the end of the prior fiscal year second quarter. There were no order cancellations in the quarter and $41.4 million in orders aged out in the quarter as they were more than 30 months in age.


Cash, cash equivalents, and short-term restricted cash were $67.9 million as of December 31, 2022, a decrease of $21.0 million from June 30, 2022.

 

Fiscal Six Months Results

 

Total net revenue in the six months ended December 31, 2022 was $211.3 million, compared to $223.7 million in the same prior fiscal year period. Product revenue for the six months ended December 31, 2022 was $107.9 million, compared to $113.5 million in the same prior fiscal year period, while service revenue totaled $103.4 million, compared to $110.2 million in the same prior fiscal year period.

Total gross profit in the six months ended December 31, 2022 was $77.6 million, or 36.7 percent of total net revenue, compared to total gross profit of $82.2 million, or 36.7 percent of total net revenue in the same prior fiscal year period.

 

Operating expenses in the six months ended December 31, 2022 were $77.0 million, including non-recurring charges of $1.9 million for restructuring charges and $1.1 million of ERP and ERP related expenditures, compared to $75.8 million in the same prior fiscal year period. Excluding these non-recurring charges, total operating expenses were down 2.3 percent compared to the same period in prior fiscal year.

Net loss in the six months ended December 31, 2022 was $7.3 million, or $0.08 per share, compared to a net loss of $0.8 million, or $0.01 per share, in the same prior fiscal year period. Adjusted EBITDA for the six months ended December 31, 2022, was $10.4 million, compared to $12.2 million in the same prior fiscal year period.

 

Gross product orders in the six months ended December 31, 2022 totaled $148.9 million, compared to $155.4 million in the same prior fiscal year period. Order backlog as of December 31, 2022 was $515.2 million, approximately 11.4% percent lower than at the end of same period in the prior fiscal year period.

 

Fiscal Year 2023 Financial Guidance

 

Accuray’s financial guidance is based on current expectations. The following statements are forward-looking and actual results could differ materially depending on market conditions, the impact of the current global economic environment and the Covid-19 pandemic, supply chain disruption, and the factors set forth under “Safe Harbor Statement” below.

 

The company is reaffirming guidance for fiscal year 2023 as follows:

Total revenue is expected in the range of $447.0 million to $455.0 million, representing a year-over-year growth at the midpoint of the range of 5 percent.
Adjusted EBITDA is expected in the range of $26.0 million to $30.0 million.

 

Guidance for non-GAAP financial measures excludes depreciation and amortization, stock-based compensation, interest expense, provision for income taxes, restructuring charges and ERP and ERP related expenditures. For more information


regarding the non-GAAP financial measures discussed in this press release, please see "Use of Non-GAAP Financial Measures" below.

 

Conference Call Information

 

Accuray will host a conference call beginning at 1:30 p.m. PT/4:30 p.m. ET today to discuss results for the second quarter of fiscal 2023 as well as recent corporate developments. Conference call dial-in information is as follows:

U.S. callers: (833) 316-0563
International callers: (412) 317-5747

 

Individuals interested in listening to the live conference call via the Internet may do so by logging on to the Investor Relations section of Accuray’s website, www.accuray.com. There will be a slide presentation accompanying today’s event which can also be accessed on the company’s Investor Relations page at www.accuray.com.

 

In addition, a taped replay of the conference call will be available beginning approximately one hour after the call’s conclusion and will be available for seven days. The replay number is (877) 344-7529 (USA), or (412) 317-0088 (International), Conference ID: 6435845. An archived webcast will also be available on Accuray’s website until Accuray announces its results for the third quarter of fiscal 2023.

 

 

Use of Non-GAAP Financial Measures

 

Accuray reports its financial results in accordance with generally accepted accounting principles in the United States (GAAP) and the rules of the SEC. To supplement its financial statements prepared and presented in accordance with GAAP, Accuray uses certain non-GAAP financial measures, such as adjusted EBITDA, gross orders on a constant currency basis and net revenue on a constant currency basis.

 

Accuray has supplemented its GAAP net income (loss) with a non-GAAP measure of adjusted earnings before interest, taxes, depreciation, amortization and stock-based compensation (“adjusted EBITDA”). The calculation of adjusted EBITDA also excludes certain non-recurring, irregular and one-time items, including restructuring charges and ERP and ERP related expenditures. Management believes that this non-GAAP financial measure provides useful supplemental information to management and investors regarding the performance of the company and facilitates a meaningful comparison of results for current periods with previous operating results. A reconciliation of GAAP net income (loss) (the most directly comparable GAAP measure) to non-GAAP adjusted EBITDA is provided in the schedules below.

 

Accuray has also reported certain operating results on a constant currency basis in order to facilitate period-to-period comparisons of its results without regard to the impact of foreign currency exchange rate fluctuations. Management believes disclosure of non-GAAP constant currency results is helpful to investors because it facilitates period-to-period comparisons of the company’s results by increasing the transparency of the underlying performance by excluding the impact of foreign currency exchange rate fluctuations. The GAAP measure most directly comparable to net revenue on a constant currency basis is revenue. Accuray calculates the constant currency amounts by translating local currency amounts in the current period using the same foreign translation rate used in the prior period being compared against rather than the actual exchange rate in effect during the current period.

 

There are limitations in using these non-GAAP financial measures because they are not prepared in accordance with GAAP and may not be directly comparable to similarly titled measures used by other companies. These non-GAAP financial measures should not be considered in isolation or as a substitute for comparable GAAP financial measures. Investors and potential investors should consider non-GAAP financial measures only in conjunction with the company’s consolidated financial statements prepared in accordance with GAAP.

 

About Accuray

 

Accuray Incorporated (Nasdaq: ARAY) is committed to expanding the powerful potential of radiation therapy to improve as many lives as possible. We invent unique, market-changing solutions that are designed to deliver radiation treatments for even the most complex cases—while making commonly treatable cases even easier—to meet the full spectrum of patient needs. We are dedicated to continuous innovation in radiation therapy for oncology, neuro-radiosurgery, and


beyond, as we partner with clinicians and administrators, empowering them to help patients get back to their lives, faster. Accuray is headquartered in Sunnyvale, California, with facilities worldwide.

 

Safe Harbor Statement

 

Statements made in this press release that are not statements of historical fact are forward-looking statements and are subject to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements in this press release relate, but are not limited, to the company's future results of operations, including expectations regarding: total revenue and adjusted EBITDA; the effect of the global economic environment and the COVID-19 pandemic on the company and the market in general, including with respect to the company’s ability to navigate supply chain, logistics, macroeconomic, and foreign exchange challenges; delivering on the company’s growth agenda and executing on strategic partnerships; creating long term value for customers, patients, employees, and shareholders; expectations regarding commercial strategy and execution as well as growth opportunities; the company’s order and revenue growth and ability to gain market share; expectations regarding the market in China as well as with respect to the company’s China joint venture and other strategic partnerships, including its ability to create solutions that differentiate Accuray from other companies and provide value for patients, providers and shareholders; the company’s product pipeline, innovations and developments, including those developed with strategic partners, the company’s ability to drive above-market revenue growth in the radiation therapy and services market; and the company’s ability to deliver on its promise to improve the outcome and quality of life of patients diagnosed with cancer or neurological disease. These forward-looking statements involve risks and uncertainties. If any of these risk or uncertainties materialize, or if any of the company’s assumptions prove incorrect, actual results could differ materially from the results express or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, the effect of the global macroeconomic environment, including foreign exchange, and the COVID-19 pandemic on the operations of the company and those of its customers and suppliers; disruptions to our supply chain, including increased logistics costs; the company's ability to achieve widespread market acceptance of its products; the company’s ability to realize the expected benefits of the China joint venture and other partnerships; risks inherent in international operations; the company's ability to maintain or increase its gross margins on product sales and services; delays in regulatory approvals or the development or release of new offerings; the company's ability to meet the covenants under its credit facilities; the company's ability to convert backlog to revenue; and such other risks identified under the heading "Risk Factors" in the company's Annual Report on Form 10-Q, filed with the Securities and Exchange Commission (the "SEC") on November 3, 2022 and as updated periodically with the company's other filings with the SEC.

 

Forward-looking statements speak only as of the date the statements are made and are based on information available to the company at the time those statements are made and/or management's good faith belief as of that time with respect to future events. The company assumes no obligation to update forward-looking statements to reflect actual performance or results, changes in assumptions or changes in other factors affecting forward-looking information, except to the extent required by applicable securities laws. Accordingly, investors should not put undue reliance on any forward-looking statements.

 

Aman Patel, CFA

Beth Kaplan

Investor Relations, ICR-Westwicke

Public Relations Director, Accuray

+1 (443) 450-4191

+1 (408) 789-4426

aman.patel@westwicke.com

bkaplan@accuray.com

 

###

 

Financial Tables to Follow

 

 


Accuray Incorporated

Condensed Consolidated Statements of Operations

(in thousands, except per share data)

(Unaudited)

 

 

 

Three Months Ended
December 31,

 

 

Six Months Ended
December 31,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Net revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Products

 

$

63,269

 

 

$

60,721

 

 

$

107,892

 

 

$

113,480

 

Services

 

 

51,491

 

 

 

55,554

 

 

 

103,361

 

 

 

110,237

 

Total net revenue

 

 

114,760

 

 

 

116,275

 

 

 

211,253

 

 

 

223,717

 

Cost of revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Cost of products

 

 

39,248

 

 

 

35,520

 

 

 

68,098

 

 

 

67,029

 

Cost of services

 

 

32,545

 

 

 

38,128

 

 

 

65,591

 

 

 

74,537

 

Total cost of revenue

 

 

71,793

 

 

 

73,648

 

 

 

133,689

 

 

 

141,566

 

Gross profit

 

 

42,967

 

 

 

42,627

 

 

 

77,564

 

 

 

82,151

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

14,641

 

 

 

14,697

 

 

 

28,733

 

 

 

29,079

 

Selling and marketing

 

 

13,586

 

 

 

13,233

 

 

 

24,381

 

 

 

24,504

 

General and administrative

 

 

12,035

 

 

 

10,716

 

 

 

23,927

 

 

 

22,176

 

Total operating expenses

 

 

40,262

 

 

 

38,646

 

 

 

77,041

 

 

 

75,759

 

Income from operations

 

 

2,705

 

 

 

3,981

 

 

 

523

 

 

 

6,392

 

Loss on equity method investment, net

 

 

(699

)

 

 

(832

)

 

 

(1,067

)

 

 

(1,172

)

Other expense, net

 

 

(2,831

)

 

 

(2,490

)

 

 

(5,389

)

 

 

(5,158

)

Income (loss) before provision for income taxes

 

 

(825

)

 

 

659

 

 

 

(5,933

)

 

 

62

 

Provision for income taxes

 

 

1,049

 

 

 

480

 

 

 

1,390

 

 

 

911

 

Net income (loss)

 

$

(1,874

)

 

$

179

 

 

$

(7,323

)

 

$

(849

)

Net income (loss) per share - basic

 

$

(0.02

)

 

$

0.00

 

 

$

(0.08

)

 

$

(0.01

)

Net income (loss) per share - diluted

 

$

(0.02

)

 

$

0.00

 

 

$

(0.08

)

 

$

(0.01

)

Weighted average common shares used in
   computing loss per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

94,567

 

 

 

91,761

 

 

 

94,048

 

 

 

91,299

 

Diluted

 

 

94,567

 

 

 

93,932

 

 

 

94,048

 

 

 

91,299

 

 

 


Accuray Incorporated

Condensed Consolidated Balance Sheets

(in thousands)

(Unaudited)

 

 

 

December 31,

 

 

June 30,

 

 

 

2022

 

 

2022

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

67,729

 

 

$

88,737

 

Restricted cash

 

 

189

 

 

 

204

 

Accounts receivable, net

 

 

89,187

 

 

 

94,442

 

Inventories

 

 

155,665

 

 

 

142,254

 

Prepaid expenses and other current assets

 

 

23,536

 

 

 

23,794

 

Deferred cost of revenue

 

 

642

 

 

 

1,459

 

Total current assets

 

 

336,948

 

 

 

350,890

 

Property and equipment, net

 

 

11,155

 

 

 

12,685

 

Investment in joint venture

 

 

12,276

 

 

 

13,879

 

Operating lease right-of-use assets, net

 

 

25,334

 

 

 

16,798

 

Goodwill

 

 

57,776

 

 

 

57,840

 

Intangible assets, net

 

 

268

 

 

 

250

 

Long-term restricted cash

 

 

1,293

 

 

 

1,213

 

Other assets

 

 

23,719

 

 

 

19,294

 

Total assets

 

$

468,769

 

 

$

472,849

 

Liabilities and equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

33,861

 

 

$

31,337

 

Accrued compensation

 

 

20,099

 

 

 

29,441

 

Operating lease liabilities, current

 

 

4,913

 

 

 

8,567

 

Other accrued liabilities

 

 

30,301

 

 

 

30,285

 

Customer advances

 

 

17,169

 

 

 

25,290

 

Deferred revenue

 

 

72,675

 

 

 

75,375

 

Short-term debt

 

 

5,702

 

 

 

8,563

 

Total current liabilities

 

 

184,720

 

 

 

208,858

 

Operating lease liabilities, non-current

 

 

22,664

 

 

 

10,453

 

Long-term other liabilities

 

 

5,181

 

 

 

3,748

 

Deferred revenue, non-current

 

 

30,357

 

 

 

24,694

 

Long-term debt

 

 

174,102

 

 

 

171,907

 

Total liabilities

 

 

417,024

 

 

 

419,660

 

Equity:

 

 

 

 

 

 

Common stock

 

 

95

 

 

 

94

 

Additional paid-in capital

 

 

550,288

 

 

 

543,211

 

Accumulated other comprehensive income

 

 

1,541

 

 

 

2,406

 

Accumulated deficit

 

 

(500,179

)

 

 

(492,522

)

Total equity

 

 

51,745

 

 

 

53,189

 

Total liabilities and equity

 

$

468,769

 

 

$

472,849

 

 


Accuray Incorporated

Summary of Orders and Backlog

(in thousands, except book to bill ratio)

(Unaudited)

 

 

 

 

 

Three Months Ended
December 31,

 

 

Six Months Ended
December 31,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Gross Orders

 

$

79,035

 

 

$

85,381

 

 

$

148,883

 

 

$

155,365

 

Net Orders

 

 

40,869

 

 

 

40,183

 

 

 

60,439

 

 

 

80,946

 

Order Backlog

 

 

515,236

 

 

 

581,267

 

 

 

515,236

 

 

 

581,267

 

Book to bill ratio (a)

 

 

1.2

 

 

 

1.4

 

 

 

1.4

 

 

 

1.4

 

(a) Book to bill ratio is defined as gross orders for the period divided by product revenue for the period

 

 

 

Accuray Incorporated

Reconciliation of GAAP Net Income (Loss) to Adjusted Earnings Before Interest, Taxes, Depreciation,

Amortization and Stock-Based Compensation (Adjusted EBITDA)

(in thousands)

(Unaudited)

 

 

 

Three Months Ended
December 31,

 

 

Six Months Ended
December 31,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

GAAP net income (loss)

 

$

(1,874

)

 

$

179

 

 

$

(7,323

)

 

$

(849

)

Depreciation and amortization (a)

 

 

1,151

 

 

 

1,422

 

 

 

2,327

 

 

 

2,841

 

Stock-based compensation

 

 

3,126

 

 

 

2,695

 

 

 

6,042

 

 

 

5,211

 

Interest expense, net (b)

 

 

2,642

 

 

 

2,070

 

 

 

4,898

 

 

 

4,106

 

Provision for income taxes

 

 

1,049

 

 

 

480

 

 

 

1,390

 

 

 

911

 

Restructuring charges

 

 

1,938

 

 

 

 

 

 

1,938

 

 

 

 

ERP and ERP related expenditures

 

 

466

 

 

 

 

 

 

1,121

 

 

 

 

Adjusted EBITDA

 

$

8,498

 

 

$

6,846

 

 

$

10,393

 

 

$

12,220

 

(a) consists of depreciation, primarily on property and equipment as well as amortization of intangibles.

(b) consists primarily of interest expense associated with outstanding debt.

 

 

 

 

 


Accuray Incorporated

Forward-Looking Guidance

Reconciliation of Projected Net Income (Loss) to Projected Adjusted Earnings Before Interest, Taxes, Depreciation, Amortization and Stock-Based Compensation (Adjusted EBITDA)

(in thousands)

(Unaudited)

 

 

 

Twelve Months Ending
June 30, 2023

 

 

 

From

 

 

To

 

GAAP net loss

 

$

(5,500

)

 

$

(1,500

)

Depreciation and amortization (a)

 

 

6,300

 

 

 

6,300

 

Stock-based compensation

 

 

11,600

 

 

 

11,600

 

Interest expense, net (b)

 

 

8,000

 

 

 

8,000

 

Provision for income taxes

 

 

2,000

 

 

 

2,000

 

Restructuring charges

 

 

2,000

 

 

 

2,000

 

ERP and ERP related expenditures

 

 

1,600

 

 

 

1,600

 

Adjusted EBITDA

 

$

26,000

 

 

$

30,000

 

(a) consists of depreciation, primarily on property and equipment as well as amortization of intangibles.

(b) consists primarily of interest expense associated with outstanding debt.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


Slide 1

Q2’FY23 Earnings Call February 1, 2023


Slide 2

Proprietary and Confidential Property of Accuray Safe Harbor Statement   Statements in this presentation (including the oral commentary that accompanies it) that are not statements of historical fact are forward-looking statements and are subject to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements in this presentation relate, but are not limited, to: expectations regarding fiscal 2023 full-year adjusted EBITDA and revenue; our positioning and strategy for accelerating revenue growth and market share; expectations regarding our strategic pillars; expectations regarding growing momentum in orders; expectations regarding market growth rates and market trends; expectations regarding new product enhancements or offerings and partnerships; our ability to expand addressable markets; expectations regarding our installed base; expectations related to our China joint venture; and expectations related to our revenue growth and market share going forward. Forward-looking statements generally can be identified by words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “projects,” “may,” “will be,” “will continue,” and similar expressions. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from expectations. These risks and uncertainties include, but are not limited to: the effects of the COVID-19 pandemic on our business, financial condition, results of operations or cash flows; disruptions to our supply chain, including increased logistics costs; our ability to achieve widespread market acceptance of our products, including new product offerings and improvements; our ability to develop new products or enhance existing products to meet customers’ needs and compete favorably in the market; our ability to realize the expected benefits of the joint-venture and other partnerships; risks inherent in international operations; our ability to effectively manage our growth; our ability to maintain or increase our gross margins on product sales and services; delays in regulatory approvals or the development or release of new offerings; our ability to meet the covenants under our credit facilities; our ability to convert backlog to revenue; and other risks identified under the heading “Risk Factors” in our quarterly report on Form 10-Q, filed with the Securities and Exchange Commission (the “SEC”) on November 3, 2022, and as updated periodically with our other filings with the SEC.    Forward-looking statements speak only as of the date the statements are made and are based on information available to Accuray at the time those statements are made and/or management’s good faith belief as of that time with respect to future events. Accuray assumes no obligation to update forward-looking statements to reflect actual performance or results, changes in assumptions or changes in other factors affecting forward-looking information, except to the extent required by applicable securities laws. Accordingly, investors should not place undue reliance on any forward-looking statements.  Non-GAAP Financial Measures   This presentation also contains non-GAAP financial measures.  Management believes that non-GAAP financial measures provide useful supplemental information to management and investors regarding the performance of the company and facilitates a more meaningful comparison of results for current periods with previous operating results.  Additionally, these non-GAAP financial measures assist management in analyzing future trends, making strategic and business decisions, and establishing internal budgets and forecasts.  A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measure is provided in the Appendix.   There are limitations in using these non-GAAP financial measures because they are not prepared in accordance with GAAP and may be different from non-GAAP financial measures used by other companies.  These non-GAAP financial measures should not be considered in isolation or as a substitute for GAAP financial measures.  Investors and potential investors should consider non-GAAP financial measures only in conjunction with the company’s consolidated financial statements prepared in accordance with GAAP.  Medical Advice Disclaimer   Accuray Incorporated as a medical device manufacturer cannot and does not recommend specific treatment approaches. Individual results may vary.    Forward-looking Statements This presentation is intended exclusively for investors. It is not intended for use in Sales or Marketing.


Slide 3

Accuray Overview Global Leader in Precision Radiation Therapy Vision: To expand the curative power of radiation therapy to improve as many lives as possible Systems Installed in Over 60 Countries1 1: As of October 20, 2022 2: Estimated percentage of revenue invested into R&D Installed Base Milestone Expected by 1H of 2023 Main Manufacturing Facility Madison, WI 22% $430M R&D Spend In FY222 Patents In Portfolio1 14%  392 Key FY22 Financials Total Revenue YOY Product Revenue Growth 1,000th 1,000+ Global Employee Presence1 3 2 Precision Platforms Proprietary and Confidential Property of Accuray 3


Slide 4

Suzanne Winter President and CEO Ali Pervaiz Senior Vice President, Chief Financial Officer Sandeep Chalke Senior Vice President, Chief Commercial Officer Jesse Chew Senior Vice President, General Counsel Mike Hoge Senior Vice President, Global Operations Patrick Spine Senior Vice President, Chief Administrative Officer Jim Dennison Senior Vice President, Global Quality & Regulatory Affairs Accuray Executive Leadership Team 4


Slide 5

Q2’FY23 Highlights Accuray - Genolier Innovation Hub partnership NMPA regulatory submission completed for Tomo® C, the joint venture product for the China Type B segment Awarded 18 systems in the November 2022 Ministry of Health Type A central bidding process in China1 Received IMV Award for Best in Service in Radiation Oncology for 2022 Completed production and testing of the first Tomo C unit in Tianjin manufacturing operations 34 new orders globally for Radixact® and CyberKnife® Systems with 92% year over year growth in Americas region 1 ccgp.gov.cn; chinabidding.com


Slide 6

Radiation Therapy Market1 Accuray revenue is growing faster than the market 1: ReAnin Radiotherapy Market, Global Industry insights and trends 2017-2027. $3.3B $2.5B $- $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 Proton Therapy Cobalt Brachytherapy Systemic Therapy Software Total: $5.8B $M Accuray competes in Premium and Specialty Markets Proprietary and Confidential Property of Accuray Accuray competes in $1.6B market 27% share in FY22 Total Addressable Market: $3.3B; LSD% growth Linacs MR-linac GammaKnife CyberKnife Radixact Addressable Market Total RT Market Size 6


Slide 7

RT Strongly Positioned for Value-based Care U.S. Cancer Expenditures Estimate ($ Billion)1,2 1: Dieguez G., Ferro C., Pyenson B.S. A multi-year look at the cost burden of cancer care: Milliman research report.  https://milliman-cdn.azureedge.net/-/media/Milliman/importedfiles/uploadedFiles/insight/2017/cost-burden-cancer-care.ashx (Published 2017. Accessed August 21, 2020) 2: NIH National Cancer Institute Cancer Trend Progress Report https://progressreport.cancer.gov/after/economic_burden (Data as of April 2022)  3: https://www.cancer.gov/publications/patient-education/radiation-and-you-2021-508.pdf Proven Outcomes Enhanced Patient Experience Non-Invasive Cancer patients treated with radiation therapy3 ~60% $6.30 $23.00 $48.00 7


Slide 8

ClearRT™: Continued Rapid Adoption of New Standard of Imaging for Radixact® CT-Linac Helical fan-beam kVCT imaging 153 orders and 99 shipments since introduction in Q3’FY21 ClearRT™ Enhanced Imaging introduced at ASTRO Further improves visualization, reduces daily hardware warmup and calibration time Highlights


Slide 9

Strategic Areas of Focus Proprietary and Confidential Property of Accuray Drive market share through disruptive innovation Expand service business Transform through strategic partnerships Drive margin and profitability initiatives 9


Slide 10

Q2’FY23 and 1H’FY23 Financials Strong financial performance KEY FINANCIAL METRICS $M Q2 Y/Y Highlights Steady orders performance amidst significant currency fluctuations ​ Total Q2 revenue decline of 1% due to supply chain constraints and unfavorable foreign currency fluctuations OPEX includes ~$2M of restructuring charges Reaffirming FY23 full year adjusted EBITDA guidance of $26M to $30M1 1 Adjusted EBITDA is a non-GAAP measure.  Please see Slide 14, 15 and 17 for a reconciliation of Adjusted EBITDA to the most directly comparable GAAP measure. 2 Percentages shown on a constant currency basis to facilitate period-to-period comparisons without regard to the impact of foreign currency exchange rate fluctuations. 1H Y/Y Q2 Y/Y XFX2 1H Y/Y XFX2 Gross Orders $79.0M (7%) (3%) $148.9M (4%) 1% Revenues $114.8M (1%) 4% $211.3M (6%) 0% Product $63.3M 4% 8% $107.9M (5%) (1%) Service $51.5M (7%) 0% $103.4M (6%) 1% Op. Expenses $40.3M 4% $77.0M 2% R&D $14.6M (0%) $28.7M (1%) SG&A $25.6M 7% $48.3M 3% Adj. EBITDA1 $8.5M 24% $10.4M (15%)


Slide 11

Maintaining FY23 Guidance Communicated August 10, 2022 Revenue Adjusted EBITDA1 $429.9M $22.8M FY23 Guidance Range FY22 Actual $ in millions % = YoY Growth $447M - $455M +4% - 6% $26M - $30M +14% - 32% 1 Adjusted EBITDA is a non-GAAP measure.  Please see Slides 16 and 17 for a reconciliation of Adjusted EBITDA to the most directly comparable GAAP measure.


Slide 12

In Summary Growing momentum with 34 orders in the quarter Strongest product portfolio and pipeline in company’s history Multiple growth catalysts and global commercial execution Focused on margin expansion and free cash flow Positioned for Long-Term Revenue Growth and Market Share Gain


Slide 13

Thank you


Slide 14

$K GAAP net income (loss) Stock-based compensation Interest expense, net Provision for income taxes Adjusted EBITDA Depreciation and amortization Three Months Ended December 31, Three Months Ended December 31, 2021 2022 $ $ $ $ (1,874) 1,151 3,126 2,642 1,049 8,498 179 1,422 2,695 2,070 480 6,846 ERP and ERP related expenditures 466 Restructuring charges 1,938 0 0 GAAP to Adjusted EBITDA Q2 FY23 and Q2 FY22 Actual Reconciliation of Net Income (Loss) to Adjusted Earnings Before Interest, Taxes, Depreciation, Amortization and Stock-Based Compensation (Adjusted EBITDA)


Slide 15

$K GAAP net income (loss) Stock-based compensation Interest expense, net Provision for income taxes Adjusted EBITDA Depreciation and amortization Six Months Ended December 31, Six Months Ended December 31, 2021 2022 $ $ $ $ (7,323) 2,327 6,042 4,898 1,390 10,393 (849) 2,841 5,211 4,106 911 12,220 ERP and ERP related expenditures 1,121 Restructuring charges 1,938 0 0 GAAP to Adjusted EBITDA 1H FY23 and 1H FY22 Actual Reconciliation of Net Income (Loss) to Adjusted Earnings Before Interest, Taxes, Depreciation, Amortization and Stock-Based Compensation (Adjusted EBITDA)


Slide 16

GAAP to Adjusted EBITDA FY22 Actual Reconciliation of Net Income (Loss) to Adjusted Earnings Before Interest, Taxes, Depreciation, Amortization and Stock-Based Compensation (Adjusted EBITDA) $K GAAP net income (loss) Stock-based compensation Interest expense, net Provision for income taxes Adjusted EBITDA Depreciation and amortization Twelve Months Ended June 30, 2022 $ $ (5,347) 5,522 10,600 8,109 3,345 22,823 ERP and ERP related expenditures 594 One-time charge related to debt refinance and convertible exchange 0


Slide 17

$K GAAP net income (loss) Stock-based compensation Interest expense, net Provision for income taxes Adjusted EBITDA Depreciation and amortization To From $ $ $ $ (5,500) 6,300 11,600 8,000 2,000 26,000 (1,500) 6,300 11,600 8,000 2,000 30,000 ERP and ERP related expenditures 1,600 Restructuring charges 2,000 1,600 2,000 GAAP to Adjusted EBITDA FY23 – Forward Looking Guidance Actual Reconciliation of Net Income (Loss) to Adjusted Earnings Before Interest, Taxes, Depreciation, Amortization and Stock-Based Compensation (Adjusted EBITDA) Twelve Months Ended June 30, 2023

EX-99.3

EXHIBIT 99.3

https://cdn.kscope.io/42e85e6493cba383222016e6f988eb0e-img237797534_0.jpg 

 

Robert C. Kill Joins Accuray Board of Directors

 

SUNNYVALE, Calif., February 1, 2023 – Accuray Incorporated (NASDAQ: ARAY) announced today the appointment of Robert C. Kill to the company’s Board of Directors, effective as of January 30, 2023. Mr. Kill is a skilled healthcare executive with more than 30 years’ experience transforming various healthcare-related companies.

 

In his most recent executive position as CEO of Parata Systems, Mr. Kill grew company revenue over 5X during his tenure before it sold last year for more than $1.5 billion. Before Parata, Mr. Kill was affiliated with two private equity funds, Frazier Healthcare Partners and Altamont Capital Partners, where he focused on various health care portfolio companies. Prior to this, Mr. Kill held executive leadership positions with medical device, healthcare service and healthcare IT companies. He began his career at Baxter Healthcare.

 

“Rob’s public and private company CEO experiences directly align with our organization’s strategic focus areas, making him an excellent addition to the Accuray Board of Directors. He has a well-established reputation for driving transformative business results, improving customers’ experience and managing key stakeholder relationships on behalf of both large and small companies. We are very excited to have Rob join our board and look forward to his contributions,” said Suzanne Winter, President and CEO of Accuray.

 

“As a healthcare industry veteran, I understand the value that the Accuray radiation therapy technology provides to medical care teams and patients, and I strongly believe there is untapped potential here. I’m looking forward to working with Suzanne, the senior management team and other board members to help create value for all of Accuray’s constituents,” said Rob Kill.

 

About Accuray

Accuray is committed to expanding the powerful potential of radiation therapy to improve as many lives as possible. We invent unique, market-changing solutions that are designed to deliver radiation treatments for even the most complex cases—while making commonly treatable cases even easier—to meet the full spectrum of patient needs. We are dedicated to continuous innovation in radiation therapy for oncology, neuro-radiosurgery, and beyond, as we partner with clinicians and administrators, empowering them to help patients get back to their lives, faster. Accuray is headquartered in Sunnyvale, California, with facilities worldwide. To learn more, visit www.accuray.com or follow us on Facebook, LinkedIn, Twitter, and YouTube.

 

###

 

Investor Contact Media Contact

Aman Patel, CFA Beth Kaplan

Investor Relations, ICR-Westwicke Accuray

+1 (443) 450-4191 +1 (408) 789-4426

aman.patel@westwicke.com bkaplan@accuray.com